But while some Czechs may be flushed with pride, President Vaclav Klaus is not, and that has officials in Brussels riled. The Czech leader, a Euro skeptic in the best of times, has refused to fly the E.U. flag over public buildings like Prague Castle, saying it reminds him of the days when his country was made to fly the Soviet flag. Outgoing E.U. president Nicolas Sarkozy of France called that stance an "outrage" and a "wound," while European Commission president José Manuel Barroso said anyone comparing the E.U. with the Soviet Union "doesn't understand what the Soviet Union was" and "does not understand what democracy is." (Read TIME's top 10 news stories of 2008.)

The flag spat underlines the anxiety surrounding the Czech presidency. Many of Europe's leaders question how Prague can helm the E.U. over the next six months when the Czech president is so unenthusiastic about the group. Klaus has been an outspoken critic of the E.U. for years and says the Czech presidency is an insignificant event. He regularly criticizes major E.U. policies, has refused to sign the Lisbon Treaty and dismisses E.U. climate-change legislation as a "silly luxury" that will exacerbate the international financial crisis. A 67-year-old economist who helped build the Czechs' postcommunist democracy, Klaus likens bank bailouts to "old socialism."

In Brussels, officials wonder whether Klaus might bring the E.U. to a grinding halt  and if is there anything that can be done about it. The first half of 2009 features a busy E.U. agenda of summits and meetings, with European parliamentary elections in June.

Hans Martens, chief executive of the European Policy Centre, says the new presidency will be a stark contrast to the French one, which boldly tackled big issues like the Russia-Georgia conflict, the economic crisis and the E.U.'s emissions-cutting policies. "We have just had a very active French presidency, and with Sarkozy, a showman in the driving seat," Martens says. "The Czech government will aim to drive the team forward, but Klaus won't take a low profile. He won't be able to resist temptation to be provocative and do symbolic things that annoy."

Concern was so acute a few weeks ago that senior French officials briefly floated a plan for Sarkozy to continue hosting E.U. summits after his presidency finishes. The idea was quickly abandoned, but doubts about the Czechs' commitment to their temporary role linger. (See pictures of Sarkozy in the U.K.)

For their part, Czech officials in Brussels insist that Klaus will be active and host the requisite summits. Center-right Czech Prime Minister Mirek Topolanek is also keen to ensure the Czech presidency tackles big issues like the financial crisis and the Lisbon Treaty, officials say. Topolanek has insisted that the E.U. is vital for the Czech Republic, given its Soviet-era past. "It's by far better to kiss the German Chancellor than to hug the Russian bear," he wrote in a recent newspaper article for the Mladá Fronta DNES.

And just because the current Czech government is led by Euro skeptics doesn't mean they might not have good ideas. "The Czech government could rise to the challenge nonetheless," says Hugo Brady, from the Centre for European Reform, a London-based think tank. "As a small country, it is used to making deals, so it knows about the art of compromise."

Still, the rest of Europe will be watching closely. "Older member states want to see if a former Warsaw Pact country can be counted on for this responsibility," says Andrew Duff, a British Liberal Democrat member of the European Parliament. "If the Czechs screw up, it would strengthen the French-led arguments for a directory of big member states to take over the management of the E.U."